Q&A: Microsoft Forms Unified Communications Group to Deliver Innovative Communications Solutions

REDMOND, Wash., Jan. 30, 2006 – Microsoft today announced it is merging the Exchange and Real-Time Collaboration (RTC) groups to form the Unified Communications Group (UCG). With the mission-critical nature of e-mail and the rapidly increasing use of instant messaging, VoIP, audio/video/Web conferencing, customers are asking for an integrated communications experience that enables them to intuitively and seamlessly communicate across all modes of communication. The merger of the teams aligns Microsoft’s efforts internally and allows the company to more rapidly and effectively addresses these customer needs.

The Unified Communications Group resides in Microsoft’s Business Division, led by division President Jeff Raikes. The combined group will be led by Anoop Gupta, currently corporate vice president of the RTC group.

PressPass spoke with Gupta to learn more about the organizational change and the company’s overall unified communications strategy.

PressPass: Why did Microsoft decide to form the Unified Communications Group?

Gupta: Our vision for Unified Communications (UC) stems from two primary drivers. First, customers have told us about the pain and loss of productivity they experience everyday due to multitude of silo’ed communications tools – e-mail/calendaring, IM, voice-telephony, audio/video/Web conferencing, etc. – across multiple devices. It is not unusual to see people first calling “office#,” leaving voice mail, then calling “cell#,” (saying, “I left message on office#”), then sending the person e-mail, when it should have been clear from calendar information that the person is unreachable at an offsite. Second, UC is driven by the technological convergence that is driving all communications technologies – IM, VoIP-telephony, SMS, audio-video-Web conferencing) to be IP-based. For example, the move from TDM (time-division multiplexing) voice to VoIP itself is driving a major industry transformation as evidenced by news stories everyday.

Anoop Gupta, Corporate Vice President, Microsoft Real-Time Collaboration Business Unit

Unified Communications is about breaking down today’s silo’ed communications experiences and instead providing rich communication capabilities that allow people, teams, organizations to communicate simply and effectively while integrating seamlessly with business applications and processes. It will enable the millions of information workers using our products to communicate seamlessly across different communication modes and devices, while at the same time reducing the cost and complexity of our customers’ communications infrastructure, providing compelling business value to our customers. The formation of the UCG further represents Microsoft’s commitment to rapidly deliver on this vision for our business customers and for our partner ecosystem.

PressPass: Why is Microsoft combining the Exchange and RTC groups to realize this vision?

Gupta: With the merger of the Exchange and RTC groups, the new UCG will drive the delivery of an integrated business communications portfolio that spans e-mail, calendaring, voice mail, instant messaging, audio/video/Web conferencing and integrated voice over Internet Protocol (VoIP) solutions for customers. The merger brings together key assets related to UC in a tightly connected team, making it easier to ensure we have well-aligned priorities, an integrated R&D platform, and the best partner ecosystem to rapidly deliver innovative solutions that address key customer pain points and provide the highest business value.

By combining the Exchange and RTC groups, Microsoft is showing a strong commitment to our business customers that the company is focused on delivering innovative, unified communications solutions that not only make life much easier and more productive for information workers, but also allow companies to further leverage their existing infrastructure investments, lowering TCO.

With this organizational change, we’re continuing to bring together Microsoft’s business-productivity assets under Microsoft Business Division, which include desktop applications, servers, software services and solutions, under the leadership of Jeff Raikes.

PressPass: How does this announcement impact existing products?

Gupta: Despite the fact that Exchange and RTC have existed as separate organizational entities at Microsoft, these groups have a great record of collaborating to ensure people who are trying to communicate across these various technologies can do it effectively. Exchange, Live Communications Server, and other offerings in our portfolio will remain available as separate products to enable more options for customers.

The merger of these two groups simply ensures our customers will see even deeper, more seamless experiences among our products in future releases. As we bring our unified communications vision to fruition, we will continue the momentum of existing Exchange and RTC businesses. This announcement does not affect the timing or the feature sets for the next generation of products currently under development. The next version of Exchange is a major release for us that will reduce the cost and complexity of the messaging system by providing more control for IT administrators, more value and expanded inbox access for end users, and increased security and compliance for organizations. It remains on track to release to manufacturing in late 2006 or early 2007. Additionally, Speech Server 2007 – the next version of Microsoft’s interactive voice response platform – remains on track to release to manufacturing in the latter part of 2006. Similarly, the next generation of RTC products will maintain their release schedule to ship as part of Office “12”.

PressPass: Can you provide more detail as to how Voice over IP plays into this vision?

Gupta: Microsoft’s vision for Unified Communication includes VoIP as a key mode of communication. Just as we have driven innovation around email and IM, we are entering a new era where Microsoft – working with our partner ecosystem – will deliver innovation with VoIP and introduce important new usage scenarios for business voice applications. These new scenarios will dramatically improve productivity of information workers as well as overall total cost of ownership of such solutions. Businesses should take a close look at their current and planned telephony investments and rationalize that with their PC communications investments.

PressPass: How will this reorganization affect Microsoft’s industry partners?

Gupta: E-mail, voice mail, instant messaging, conferencing and business VoIP solutions have previously resided in relatively fragmented industry segments, thereby yielding limited pockets of innovation and fewer opportunities for partners. Microsoft’s vision for unified communication presents a large and compelling opportunity for our Exchange and RTC partner ecosystem – which today consists of systems integrators, VARs, OEMs, and telecom service providers – to deliver richer solutions for their customers. We believe this is a significant opportunity that goes well beyond what e-mail or RTC segments could have offered alone.

PressPass: With Exchange moving out of the Server and Tools Business (STB) group, what do these organizational changes mean for that business group?

Gupta: This organizational change is about aligning our structure to best meet a critical customer need. STB’s strategy and business operations will remain essentially unchanged, and we absolutely expect the growth of the business to continue.

PressPass: How significant is this announcement for Microsoft?

Gupta: We are very excited about this change. Bringing together Microsoft’s broad portfolio of communications assets under the same umbrella positions us to deliver a significant wave of innovation in unified communications for our business customers.

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